New Delhi: Mumbai’s Taj Mahal and Trident hotels, the focal points of a raging terrorist attack in India’s financial capital, will definitely lose crores of revenues as both fire-ravaged properties will need to be closed for renovation. But there was little cheer for other hotels as the entire industry is likely to see a cascading impact of reduced travel on top of an already declining business from worldwide economic slowdown.

The attacks came just ahead of what are normally peak occupancy months for the country’s hotels—especially high-end ones, as international and domestic visitors head to India in the holiday season centred around Christmas and running well into January because of pleasant weather.

“Such an attack on the two biggest hotel chains in India will take its toll...we expect negative growth of 5% this year; and the attacks could even lower that," said Subhash Goyal, chairman of STIC Travel Group Pvt. Ltd.

The Indian tourism industry, including hotel, food and beverage, travel and other services, has been growing at about 20% annually for the past five years. It accounts for about 6.3% of India’s annual national income.

India, which received around five million foreign tourists in 2007-08 through March, had set a target of doubling that figure through fiscal 2010. Industry executives now say that the target looks quite difficult.

Indeed governments in Australia, New Zealand, Britain, France, Canada and the US issued travel advisories to their citizens considering travel to India.

Such missives, which make travel-related insurance valueless, “will severely impact tourist flow to India for the next five-six months", said Amitabh Kant, an Indian Administrative Service officer and one of the fathers of India’s successful “Incredible India" campaign to attract foreign visitors.

The International Herald Tribune postponed a much anticipated debut of its luxury conference planned for New Delhi’s Imperial Hotel next week citing the terrorist attacks.

A senior official in the tourism ministry said the effects of the attacks would be severe. “There has been a slow movement for January with no fresh bookings or committed bookings coming in; there will be a big drop in December itself, which is a big month for India, with all the festivities," said the official, requesting anonymity.

Both the Taj and Oberoi managements declined to comment on business issues on a day when both hotels were still figuring out casualties among both guests and staff.

The Taj Mahal, a 565-room property run by Indian Hotels Co. Ltd, had generated revenues of Rs400 crore in the year ended March, said a person with knowledge of the company’s accounts who didn’t want to be identified.

The Trident, part of the Oberoi Group of hotels owned by EIH Ltd, has some 575 rooms.

Awadesh Garg, associate vice-president at Kotak Securities Ltd, estimated shares of the two companies would open 8-10% weaker on Friday. India’s stock markets were closed Thursday.

Jaideep Ghosh, director at audit and consultancy firm KPMG Advisory Services Pvt. Ltd, said that it may take them “a year or more as they renovate the hotels".

Samar Srivastava in New Delhi and C.H. Unnikrishnan in Mumbai contributed to this story.